Planners need to advise small businesses about how they can capitalize on a tax shelter that costs the federal government billions of dollars in revenue each year—the retirement plan. They need to describe the efficiencies of making before-tax contributions and allowing earnings to grow tax deferred and/or making after-tax contributions and having tax-free withdrawals. Financial planners must also instruct plan sponsors on how a retirement plan strengthens business operations and the financial success of business owners. In other words, the retirement plan provides numerous benefits and a business that does not take advantage of these will lose out on a valuable opportunity.
Author: Kenn Beam Tacchino, JD, LLM, is a professor of taxation and financial planning at Widener University in Chester, PA. Professor Tacchino has won awards for both his teaching and his scholarly writing. Among other consulting activities, he conducts retirement planning seminars for employee groups.
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